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Fed’s Hammack warns of financial-stability risks from further rate cuts
Fed’s Hammack warns that aggressive rate cuts may raise financial-stability concerns by fueling risky lending.
Beth Hammack, President of the Cleveland Fed, cautioned that deeper rate cuts could fuel excessive risk-taking, distort market pricing, and threaten financial stability. She argued that current credit conditions are already loose, and lowering rates further might encourage speculative lending and leverage. Hammack’s warning comes amid growing debate at the Fed over how to balance inflation control with support for economic growth.